Fitch Ratings predicted a tough road ahead for Thai operator dtac, with attempts to regain market share likely to be hindered by aggressive capex by rivals AIS and True Move, along with broader economic conditions.

While a 2.3GHz network rollout fueled some network improvements and lowered subscriber losses for dtac in 2019, the ratings agency stated any gains may be short-lived as rivals increase spending on their 2.6GHz networks and 5G rollouts, likely widening their lead in quality.

Fitch Ratings believes network quality is a key factor for subscribers when choosing an operator, as price differences start to narrow.

The agency noted AIS plans to increase capex from THB23 billion ($729.6 million) in 2019 to THB35 billion this year, mostly for 5G. By contrast, dtac plans a reduction from THB17.8 billion to a range of THB8 billion to THB10 billion, with investment in the 850MHz and 900MHz bands likely to be delayed until 2021 due to signal interference issues.

Capex across the industry is likely to remain high at around 40 per cent of total revenue in 2020, mostly due to higher spectrum payments, the agency stated.

Telenor-owned dtac had a 20.7 per cent market share by subscribers in Q2 compared with True Move’s 33 per cent share, GSMA Intelligence data showed. In the two years to end-June, dtac’s mobile subscriber base fell by 2.8 million to 18.8 million, while True Move added 2 million for a total of 30 million.

Fitch Ratings stated overall service revenue dropped 3.6 per cent year-on-year during Q2: dtac’s figure was 4.2 per cent lower at THB15 billion.